2. Economic Conditions and Human Resource Development

Indonesia is entering the second long-term development in April
1994. The economic growth during the first long-term development (1969-1994) was
encouraging. During the period of 1988 to 1992 the economic growth was about 6.7
percent, which was higher than the projected economic growth rate of the same
period. The main reasons for the high growth is the increase of manufacture
export which is supported by the growth of the construction sector, electric
generator construction, transportation and telecommunication sectors. It is
expected that the economic growth will have the same pattern in 1994 and 1995
and will not be less than the projected rate which is between 6-7 percent.

The economic growth in Indonesia is high, due to the support of
oil in 1970. Oil exports contributed 84 percent to Gross Domestic Product,
especially at the peak era of oil in 1982, while the contribution of the
agricultural sector was only 13 percent and manufacture export was 3 percent.
The decrease of export in 1983 up to 1986 has forced Indonesia to launch
packages of deregulation, creating an economy based on the power of market. The
result was the increase of non-oil export up to 24.3 percent annually, during
1986-1992, with the highest contribution of manufacture sector of about 35.1
percent in the same period. In 1992 the contribution of non-oil export was
higher than the oil sector. More than 50 percent of the total Indonesian export
was supported by non oil sector. The first long-term development of Indonesia
has successfully solved the problems of food and clothing. The emphasis of the
national development was mainly on the benefit of natural resources such as
agriculture, mining, petroleum etc. which will not last forever.

For the success of the second long-term development,
concentration has to be focused on the development and the utilisation of human
resources to produce maximum economic growth. Indonesia has chosen
industrialisation as the main alternative for economic takeoff. Its consequences
is a transformation process of industrial culture orientation. To face the
economic takeoff through industrialisation, the national education system should
give more emphasis on science and technology. Indonesias major challenge
is to create jobs. Increased skill level in all sectors is required to position
Indonesia for industrial takeoff, scheduled to occur during the sixth five-year
plan.

The need for middle level manpower in the labour force structure
will continuously increase during the coming development stages, and therefore
serious attention should be paid to technical and vocational education. The new
guidelines of the state policy (GBHN) of 1993 has given clearly the direction of
the development of the country in the future. The central development of the
second long-term development (1994-2019) and PELITA VI (1994-1999) is the
development of economy and human resource development. Education as the main
means of the development of human resources must clearly play the role of
forming the students to be the national asset. They have to be productive and
earn their own living. They also should have the ability to create excellent
product of Indonesian industry in confronting competition in the global
market.